I'm not going to comment on who I think is in the right in this case. I'm not a lawyer, I don't have access to the contract, and have no inside knowledge of what actually went on.
However, when I heard that the authors blamed the breach on other difficulties Wizards of the Coast has been having lately, I thought: I wonder if I do some Google searching, will I find any recent controversies over racial insensitivity and sexist behavior?
It turns out that yes, WotC had to terminate their relationship with a frelancer who has admitted he's a sexual predator. And they had to apologize for a Magic the Gathering card that used white supremacist symbology. And they've been accused of racial prejudice in their hiring practices, and creating a hostile work environment for people of color.
WotC may not be in the wrong for any of this: maybe the accusations are false, maybe they had no knowledge that something was wrong in the other cases. My point is not to say that WotC has done something wrong. However, they are obviously having some image problems, and as a consequence may be backing out of previously-approved plans that look questionable.
And maybe they are doing this the right way, or maybe they're doing it wrong. I don't know. What I do know is that I've seen the same reaction in the D&D community that I've seen before, for example when WotC removed all negative racial ability modifiers a couple months ago. "Oh, it's because of those horrible SJWs, protesting the way fictional races like orcs and goblins are being treated, as if they were real people!"
No, most of their troubles are not with people protesting fictional racial injustice. They are choosing to address non-critical issues instead of admitting to possible real-world injustices of a more serious nature.
And again, maybe what they are doing is fine... but the reaction of the typical D&D fan doesn't seem fine at all.